GNC announced an agreement to integrate its manufacturing division with IVC, a global leader in vitamins and nutritional supplement manufacturing, through a strategic joint venture. Under the terms of the agreement, GNC will receive an aggregate of $101 million from IVC in exchange for the net assets of the Nutra manufacturing facility and the Anderson facility and will retain an initial 43 percent ownership in the joint venture. Over the next four years, GNC will receive an additional $75 million, adjusted up or down based on the joint venture’s future performance, from IVC as IVC’s ownership of the joint venture increases to 100%. The joint venture will be responsible for the manufacturing of the products produced today by Nutra.
The global dietary supplements market is expected to reach USD 278.02 billion by 2024, at a CAGR of 9.6% from 2016 to 2024, according to research firm Grand View Research, and the global beauty supplement market is projected to reach USD 6.8 billion by 2024. With the brick-and-mortar footprint of GNC and the manufacturing capabilities of IVC, the joint venture should be positioned to capitalize on the wellness trend that is leading to the growth in the supplement category.
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